Accessibility links

Breaking News

Russia: Former Finance Minister Gives High Marks To Putin, Low Marks To Gazprom

One of Russia's most prominent economists was in New York yesterday (16 May) to talk about Russia's progress in the political and financial arenas. Boris Fyodorov, Russia's former deputy prime minister and finance minister, told a gathering of U.S. economists and investors in New York that President Vladimir Putin did much in his first year in office to begin the process of "normalization" in Russia. He also promised an end to what he called the "notorious" corporate policies of gas monopoly Gazprom, of which he is a board member. RFE/RL correspondent Nikola Krastev reports from New York.

New York, 17 May 2001 (RFE/RL) -- Speaking at an informal roundtable gathering of economists and investors yesterday, former Russian Deputy Prime Minister and Finance Minister Boris Fyodorov said Russian President Vladimir Putin exceeded expectations in his first year in power. The situation in Russia, Fyodorov said, has markedly improved since former President Boris Yeltsin left office:

"Today [in Russia] we have gone from 'awful' to just 'bad.' And this is a revolution. Once you have a president who is healthy, sober, goes to the office, looks into business, analyzes things, [and is] just working -- I think it's a revolution."

Fyodorov spoke at the New York headquarters of the Eurasia Group, an organization promoting understanding and development in the states of Eastern Europe and the CIS. During his remarks, he also said that Putin has used his time in office to systematically strengthen his position at every level of government:

"It's clear that whatever deals [were being done] behind the scenes by Mr. Yeltsin while the succession [to Putin] was being planned are probably coming to an end. If we look at the [recent] changes in the government -- at the Ministry of Defense, the Ministry of the Interior, and the Tax Police -- it's clear that Mr. Putin is putting, in my opinion, better people in the proper positions, and clearly people who are his [allies.]"

Putin's cabinet reshuffle in March was widely perceived as a move to strengthen his support base within the government. In addition to promoting his closest advisor, Sergei Ivanov, from Security Council chief to defense minister, Putin also placed a loyalist (Boris Gryzlov) at the head of the Interior Ministry and brought in new people to head the Tax Police and the Atomic Power Ministry.

The U.S.-educated Fyodorov tempered his praise of Putin's performance by pointing to the country's still-foundering tax-collection system and criticizing what he called a "corrupt" and "manipulated" press:

"It's clear that much of the Russian press is now corrupt and will print [anything.] We like to discuss freedom of speech [in the context] of [media magnate Vladimir] Gusinsky, but I think the much bigger problem in Russia is that there's no free press, that basically you can find just about anything printed -- any slanderous attack -- if the price is high enough. And that's a sad story."

Fyodorov used himself as an example, saying at least 45 slanderous articles about him had appeared in Russian newspapers and magazines over the past three months.

Over the last year, Fyodorov, who is generally viewed as a liberal but cautious reformer, has established himself as a vocal proponent of corporate reform in Russia. He has strongly criticized two of the country's largest monopolies -- the energy firm RAO UES and gas monopoly Gazprom.

Fyodorov is the founder of the Moscow-based brokerage United Financial Group (UFG), which in recent weeks has been engaged in a deepening conflict with Gazprom over the rights of its minority shareholders.

Fyodorov used the roundtable discussion as an opportunity to criticize what he called "flagrant" attempts by Gazprom to deny shareholders' rights. A Moscow court decision last week froze a block of Gazprom shares belonging to two UFG investors, in a move that may keep minority shareholders from voting at the company's annual meeting.

Fyodorov noted some improvement in Gazprom management, such as the fact that the board of directors now holds regular meetings. But he also said shareholders were frustrated by share prices, which he said remain on a 1996 level even though energy prices in Russia are now at an all-time high.

Fyodorov went on to say he has no doubt that Putin intends for the government to gain an absolute majority in Gazprom because of what he called its "geo-strategic" importance for Russia:

"It's a matter of time, but -- whether it's two months or 12 months -- Putin will reassert control over Gazprom, probably even by trying to increase the [government's] share to 51 percent. Something like that can happen."

Attendees at yesterday's meeting included prominent financial experts such as Brian Pinto, a World Bank economist specializing in Europe and Central Asia, and Daniel Witt, president of the International Tax and Investment Center. Many of those at the meeting said they agreed with Fyodorov's assessment of the current political situation in Russia.